Daily Archive for January 6th, 2021

CASE REMANDED WHERE (1) INSURED CONCEDED VALUE WAS BELOW $75,000 AND (2) INSURER COULD NOT MEET LEGAL CERTAINTY BURDEN BY BRIDGING THE GAP WITH BALD ALLEGATIONS OF ATTORNEY’S FEES AND PUNITIVE DAMAGES (Western District)

The insured moved to remand this bad faith case to the Court of Common Pleas of Allegheny County, on the basis her claim fell below the $75,000 jurisdictional minimum amount in controversy.

“In determining whether the amount in controversy exceeds $75,000, district courts must apply the ‘legal certainty’ test …. Under this standard, [t]he case will be dismissed only if from the face of the pleadings, it is apparent, to a legal certainty, that the plaintiff cannot recover the amount claimed, or if, from the proofs, the court is satisfied to a like certainty that the plaintiff never was entitled to recover that amount.” (internal quotation marks omitted) “While a post-removal stipulation that the case is worth less than the jurisdictional threshold is not dispositive, it remains Defendant’s burden to show by a preponderance of the evidence that the operative complaint filed against it seeks an amount in excess of $75,000.”

The court disagreed there was any post-removal stipulation to the amount in controversy. Judge Barry Fisher observed that the plaintiff’s counsel, “as an officer of the court, advises that Plaintiff intends to move the matter from the General Docket of the Court of Common Pleas to the Arbitration Division, which has a jurisdictional limit of $35,000.” This amounted to a concession that the case was “valued well below the jurisdictional threshold of $75,000 necessary to invoke the diversity jurisdiction in this Court.”

Further, the complaint’s sole allegation concerning damages was that her claim was worth in excess of $5,000 based on her losses. In addition, the underlying tort claim was brought as an arbitration matter in the Court of Common Pleas, the arbitrators ruled for the tortfeasor defendant, and the case then settled.

Moreover, the insurer did “not put forth any evidence to support its bare allegation of the jurisdictional amount beyond pointing out that Plaintiff seeks attorney’s fees and punitive damages on its bad faith count.”  Following earlier precedent, the court was unwilling to accept “bare allegations that plaintiffs’ bad faith claims bridged the gap between” the coverage limits provided under the policy and the $75,000 jurisdictional minimum.

In sum, the insurer “failed to meet its burden to show that this case was worth more than $75,000 when it removed the case … and it appears to a legal certainty that Plaintiff cannot recover the jurisdictional amount in this case.”

Date of Decision: December 18, 2020

Dendy v. Geico, Inc., U.S. District Court Western District of Pennsylvania No. CV 20-1945, 2020 WL 7424970 (W.D. Pa. Dec. 18, 2020) (Barry Fisher, J.)